Friday, December 28, 2012

A Tale of Two Scopes


It is on the short list of items for prospective buyers to have inspected in addition to the general home inspection performed during the purchasing process. Think of it as a colonoscopy for a house, but should sewer scope results be given enough weight to become a deal breaker?  The biggest concern of all is the grey area surrounding the health of a sewer, and who should be responsible for the repair if something is “broken”. 

The technology for a sewer scope has been around for many years, and the cost to inspect has now come down to around $100, making it readily available.  As a result, more and more sales are requesting them, but here is the problem; if the home you are inspecting hasn’t sold in ten years, it is likely it has never had a sewer scope performed, and the owner has never had a problem with the sewer.  No one has looked into the sewer before until now and when the sewer tech puts his head 100 feet into the darkness of the septic trenches, will it be considered broken or will it be considered usable? After all, it has been function just fine for the family of 5, happily flushing and showering for the last 10 Thanksgiving Day family reunion feasts!

Case Study 2012:
The same home in West Portland Park is given a sewer scope by two different buyers, each with their own realtor and two different sellers within 6 months’ time.  The scope was also done by two different sewer tech companies.  Here is where the perception can change based on the two companies and how they approached the inspection. 

The first company is an environmental specialty service company.  Upon the inspection that took place in spring, they deem the sewer unfit and in the need of a $3,000 repair, of which they were happy to provide their services for the "necessary" repair. The buyer negotiates the $3,000 in credit from then seller and intended to call the company to fix the repair in the next year after moving in.  Within 6 months the buyer, turned homeowner is relocated for work, and is forced to sell the home not having completed this repair.

The second company is an inspection only company, and hired by the next buyer in the Fall of the same year. The inspector sees the "necessary" repair area, and gives the sewer a passing grade. 

The only history we have on the sewer is that it was fully functioning for two previous sellers, and two scopes; one pass and one fail.  Both realtors of the buyers and sellers were different, so there were no agendas that were the same.  The home was the same, and the timeframe similar. The following question arises: Should an inspector with a conflict of interest such as profiting from work to be performed, be given power to affect the sale of a home with a sewer scope? 

I see this time and time again.  Fail, fail, fail, flush, flush flush.  It might be good to know that a sewer is near the end of its life or that you may be responsible for a portion of the sewer that affects others on shared party lines.  There are many good reasons to have a scope done, but what we do with that knowledge, and considering the source of the information are the real issues we should focus on before hammering a seller, or killing a transaction that may otherwise have been the perfect home for a buyer. 

In this case study, the sales weren't damaged by the report findings, but it's a perfect scenario to show how the conflict of interest by the service company's inspection can sway the transaction today, in contrast to ten years ago. Adverse effects may or may not have happened for another 10 years, but it cost one seller $3,000 in this case, and who knows how many others perhaps unnecessarily.

For recommendations on legitimate sewer scope companies, feel free to call or e-mail.

Steve Roesch
Principal Broker
PDX Home Group
503-318-6351
Steve@PDXHomeGroup.com

Thursday, December 20, 2012

The Month in Review for Portland Real Estate

We have endured  a tough market and are looking forward to what 2013 has in store for this crucial piece of the American Dream...

November Highlights
The Portland real estate market continues to show growth in pending and closed sales. Comparing this November to November 2011, there were 1,730 pending sales, a 2.7% improvement over the 1,685 offers accepted in the same month last year. The 1,733 sales were 13.9% higher than the November 2011 sales of 1,521. At 1,675, new listings fell 17.3% from 2,026 of last November. The low inventory shows no signs of abating: the 7,216 active residential listings would be exhausted in 4.2 months at the November rate of sales. Normal seasonal variations have appeared, with all activity categories showing declines from October to November.


Year-To-Date Trends
In the first 11 months of 2012, there were 30,964 new listings, 22,726 accepted offers, and 21,546 closed sales. Compared to the same period last year, new listings are down by 4.2% from the 2011 listingcount of 32,315; but pending sales are up 17.1% from 19,411 last year; and closed sales are up 19.9% from 17,968. Prices also continue to move upward. The average sale price so far in 2012 is $273,800, 3.9% higher than the average price of $263,400 in the same period last year, while the 2012 year-to-date median of $233,900 is 5.4% higher than the median of $221,900 last year. Total market time has dropped 21.5% from 143 days last year to 112 days for the first 11 months of 2012. 











All content courtesy of Regional Multiple Listing Service


Wednesday, December 5, 2012

You could fry an egg on Portland's real estate market


There has been quite a bit of buzz about Portland's residential real estate market heating up. I can tell you first hand that the amount of buyers we are representing compared to available homes has had quite an impact on the urgency required during the home buying process. 
Proof you say? The Portland metro area now ranks number 5 nationally for housing vacancy rates. Upon compiling an On Numbers analysis, the Portland Business Journal reported that out of the 930,446 homes in the Portland area, 872,423 are occupied, totaling nearly 94 percent. San Jose is the nations leader with  a 5% vacancy rate.
Housing Inventory in Portland
RMLS - Oct. 2012 Reporting Period
According to the Regional Multiple Listing Service, "new listing held steady at 2,414, less than one percent off the pace of this time last year and 1.5% under listing activity. The spike in sales and flat listing activity has created a new low in months of inventory this year. The 7,981 active residential listings would be exhausted in just 3.8 months at the current rate of sales."
If you are a homeowner looking to sell, now is a great time to determine your home's value and put your home on the market. 
If you are a home buyer, here are some surefire ways to prevent frustration:
  1. GET PRE-APPROVED! I cannot stress this enough. In today's climate you have to show that you have the ability to obtain financing before most sellers will even consider your offer.
  2. Don't hesitate to move quickly when you find a home you love. Recently, homes are receiving offers within just a couple of hours of entering the market...that is if they have the chance to hit the market.
  3. Your Realtor is the eyes and ears of the Portland real estate market. Make sure you are being represented by a full-time agent who has networking capabilities and a heightened sense of urgency. If you do not, you will find yourself missing out on the right opportunity. Treat this like it is one of the biggest moves a person can make - because it is!

Steve Roesch, Principal Broker
PDX  Home Group
Keller Williams Realty Professionals
503-318-6351
Steve@PDXHomeGroup.com

Friday, November 16, 2012

Portland Kirk Reeves Fans start crowdfunding for Hawthorne Bridge memorial




You would always find Kirk Reeves sitting in his high-rise stool on the west end of the Hawthorne Bridge while wearing his iconic Micky Mouse hat and white tuxedo. Rain or shine, Kirk was always a happy face to see who loved serenading motorists, bicyclists and pedestrian with the sound of his trumpet during rush hour traffic. In addition to playing his trumpet, Kirk would perform magic tricks. Kirk became a fixture on the Hawthorne Bridge and everyone loved him.

The Mickey Mouse ears, trumpet, white tuxedo and the toy cart he dragged around were just a disguise to cover serious health problems and a worsening depression that he talked and wrote about openly. Reeves had long been plagued by health problems. In 1999, he fell into a 10-day diabetic coma.

On November 4th Reeves body was found. Kirk Reeves died of a self-inflicted gunshot wound, the Medical Examiner's Office has announced after locating Reeves' sister. His body was found at Bybee Lake in North Portland.

Friends will hold a candlelight vigil for Reeves on Nov. 18 at 4 p.m. starting near the west side of the Hawthorne Bridge. He’ll be remembered as a sweet man who was full of contradictions and honest about his suffering.

Since his death, fans have left an assortment of flowers, gifts and balloons at the location. Now, a group of current and former Portlanders have banded together to crowdfund a memorial for Kirk. Ultimately, the GoFundMe campaign hopes to build a statue of Reeves wearing his Mickey Mouse ears and playing his horn.

Kirk Reeves left an impression on a lot of people, who are now wanting to give back in memory of his bigheartedness. 

Thursday, September 13, 2012

Assassination of Real Estate Deals through Low-Ball Appraisals



Barbara Corcoran Outlining Issues with Real Estate Appraisals on the Today Show 9/12/2012

Low Real Estate Appraisals have become a commonplace thorn in the side of buyers and sellers alike, and finally drawing the attention of the main stream media via the Today Show thanks to our gal Barbara Corcoran. Although, we may not always see eye-to-eye with Barb, she hit the ball out of the park with this one. 

Here is a snapshot of the many factors contributing to the lack of talent in the Appraisal industry. We all know the housing bubble was caused by inflated housing prices, backed by crooked Real Estate Appraisers in cahoots with lenders to determine values over a scotch on the rocks and a handshake.  Cut to the bubble bursting, when state and federal legislators had their hand in a “solution” in an effort to “protect” the consumer. This has backfired greatly and has resulted in giant Appraisal houses employing less-experienced robots passed off as Appraisers in lieu of a local expert.

Most cities including Portland have seen a massive uptick in the Real Estate market, due to an increase in buyers, short supply of inventory, and record-low interest rates. The problem? Appraisals are based on past home sales in the last six months to a year including short sales and foreclosures, which common sense would tell you, does not accurately reflect the values of today’s market. When the Appraisal comes in low, the buyer is then turned off, and the lender is not willing to complete the loan at the agreed upon price. Deal Breaker!

The lack of talent in the Appraisal industry is single handedly contributing to major chaos to over one-third of Real Estate transactions, and is crippling the housing recovery. Be sure to protect yourself by providing the Appraiser data on your local Real Estate market, verifying that the square footage and housing stats are correct in Appraisal, ask to have short sales and bank owned properties eliminated from the comparable properties, and if worse comes to worst, pay for a new Appraisal. It helps to have a Real Estate Agent that has your back as well, and will go to bat for you when they know the Appraisal comes in too low.

Steve Roesch
Principal Broker
PDX Home Group
Keller Williams Realty Professionals
Steve@PDXHomeGroup.com
503.318.6351 direct/text
www.pdxhomegroup.com




Wednesday, August 29, 2012

Villa Sport Moving in With Beaverton's 45 Central


News of Villa Sport coming to Beaverton was discovered during a recent tour of the completed first phase of the new 45 Central development in Beaverton.  Villa Sport, located in Colorado and Texas will soon be gracing Oregonians with a stylish athletic club incorporating an open floor plan, natural light, and high-end features and equipment, giving nearby Sunset Athletic Club, West Hills Raquet Club and LA Fitness a run for their memberships.

The 7 acres of commercial space was originally reserved for a hotel, offices and retail shops, but quickly discarded when Villa Sport expressed interest in occupying the entire area. Not to worry about losing out on the amenities previously promised though. The 87,100 square foot club will feature a full service spa, café, outdoor pool and a diverse set of recreational activities, consistent with 45 Central’s vision and Villa Sport’s existing facilities.

The Beaverton Planning Commission has approved Villa Sport’s conditional use and design review applications, but no word yet on a target date for completion.

As for the 45 Central development, overall feedback is very positive. In fact, six units have already been sold to (whad’ya know) employees of the neighboring Nike and Intel.  It is evident that the developers, Metropolitan Land Group knew their target market when implementing practicality and quality craftsmanship into each of the 220 detached town homes.  Each of the four units we viewed had a useful floor plan and individualized features – perfectly suited to the tech gurus or graphic designers it was built to attract. None of the 140 condo lofts were completed in time for the tour, yet it’s safe to say the quality will most likely remain consistent with the distinctiveness of 45 Central.

45 Central Community amenities include a pool, clubhouse, gym and other activities to be left up to the future home owner’s association.  If having an athlete’s oasis such as Villa Sport is too much to resist for residents, rumor has it they will receive a discount to be determined at a later date. 

If you or someone you know is interested in a customized tour of 45 Central, we look forward to hearing from you.

Steve Roesch
PDX Home Group, Principal Broker
Keller Williams Realty Professionals
503-318-6351 (direct/text)
503-748-8387 (desk)


Thursday, August 2, 2012

Father Returns Home From Afghanistan as a Jedi Knight from Star Wars

Local dad and Colonel Rob Kiebler returns home to his son posed as a Jedi Knight from Star Wars after serving for 14 months in Afghanistan.  His son Danny, like many five year olds is an avid Star Wars fan despite the fact that his parents had originally planned to not let him watch Star Wars until he turned six – they caved during dad’s last two week leave. The video captures the unsuspecting boy’s surprise when his two favorite forces collide for an epic reunion that takes place at Downtown Portland’s Deschutes Brewery. Danny is all set for his Birthday lunch dressed in a Darth Vader shirt and shoes that have light sabers. Meanwhile, unbeknownst to him, his dad is suiting up in his Jedi Knight costume along with a few members of the 501st Legion Cloud CityGarrison. The group dresses up in movie set quality Star Wars costumes to make charity appearances.

As Danny’s dad approaches the table, accompanied by Chewbacca, Princess Leia and a couple of Storm Troopers, he pulls his hood back.  In awe of the scene playing out in front of him, it took a moment for Danny to recognize his dad upon revealing his face.

Danny’s mom Marcelle stated, “We wanted to have Rob be Darth Vader, so he could say, 'I am your Father!' but it would have been tough to hug Darth Vader”. A wise choice indeed because once it set it that his father was actually standing before him, he leapt into his dad’s arms and claimed a good dose of the kisses and hugs that were fourteen months overdue.

It looks as if Danny’s adventure doesn’t end here as Colonel Kiebler’s next tour of duty will take place in a galaxy far, far away, Belgium, where Danny and his mom will be joining him. I hear they have a big Star Wars following there. 



Steve Roesch, Pricipal Broker - PDX Home Group
503-318-6351
Steve@PDXHomeGroup.com
www.PDXHomeGroup.com

Thursday, July 12, 2012

Willamette River Jet Pack Excursions?

Photo: Courtesy of KATU.com

Oh no he didn't! A water-powered jet pack powered by Wes Dawson of Malibu, CA stole the show for a bit during the Waterfront Blues Festival on July 8th. The stunt was a promotion of a new alcoholic beverage called "Air"- which I will now be trying. This particular jet pack can stay in motion for up to 35 minutes. There are only 5 of these in the nation, and the cost is roughly $100,000. Any ideas on how we can implement this into our marketing efforts is greatly appreciated!

Tuesday, July 3, 2012

WARNING: Exposure to Gas Vapors May Cause Memory Loss


Photo Courtesy: The Bend Bulletin
I love Oregon for many reasons.  One reason is the law that prohibits common people to pump their gas themselves.  No one knows the real reason.  Is it solely to create jobs?  Is it because we need someone smarter and more trained than the common people in the other 48 states that can be allowed to work a gas pump.  (yes I know there are 50 states, but there is one other state with a similar law)

There are 3 things I appreciate about this law despite the drawbacks or backhanded sarcasm.
  1. I never have my phone call interrupted.  I just sit in my car, money hanging out the window, and put my caller on mute while jabbering, "Fillerup with Regular"
  2. If it's cold or wet out, I don't have to leave my comfortable interior, and keep my tush on the heated leather seat.  I just slip the window down about an inch, and slide the cash or card through the slot and whisper, "Regular.  Fill.  Please"  slide button up, end of transaction.
  3. My favorite of all 3.  I definitely appreciate not having to handle the greasy nozzle and having my hands smell like petroleum fuel for the next 4 hours.
But with all these small freedoms I still find a way to complain.  I find one irritating issue with majority of  attendants across the state that makes me want to crawl out of my skin and scream.

Each day, the gas attendant does the same thing, over and over again. 99% of the time the question is exactly the same.  You hand them money in the quantity of gas you desire,and you either request Regular or Premium. Or maybe super premium, if you are super pretentious and aren't in love with your money.Of course they might get thrown off by the occasional question of, "Which way to the interstate?" or "Hey, where can I smoke at the gas station", but overall the task is simple.

How is it possible that each time I disclose my specific preference, in the 30 seconds the attendant walks to the back of my car and puts the nozzle in... they somehow forgot what was just said?  They walk back, and ask, "You wanted regular, right?".

AHHHHHHHHHHHHHHHHHHHHH

I think maybe its me.  I will be more clear with my English.  Spit out my gum.  Speak louder.  Write it on the fogged up window.  No matter what I do, the question always is repeated back 30 seconds later.

I begin to suspect this attendant's true motivation. Maybe every time I pull up in my 6 year old Minivan with stickers and scratches throughout, I have impressed the attendant with my choice of premium vehicle and it DEMANDS to be fed with the best gasoline on the market.  Pay no attention to the lack of care to the outside.  This puppy wants the PREMIUM.  Feed me Seymour!!!

It's like there is some conspiracy by the oil companies to upsell the customer every time.  Like at the movie theater.  "Would you like the Massive Size Bathtub of popcorn for an extra $5 sir."  "Would you like to SUPERSIZE that?"  Are these people on commission?

I wouldn't be surprised by oil companies and  conspiracies to coexist, however, most gas stations are franchisee owned, and there are not gas station "shoppers"  who are pulling up and filling out comment cards.  "He didn't try to upsell me"  "His Carhart jacket had oil stains"  "I waited 3 minutes before he came over to help me!".

No way,  the owners are not looking for reasons to fire their employees.  They are just hoping they show up to work each day, sober.  I am too.  And for that... we thank you.

Monday, July 2, 2012

Nike's got a new neighbor...

Exactly halfway between the North Pole and the Equator, a new neighborhood awaits - 45 Central. The development will include 26 acres of contemporary homes, retail shops, an athletic club, playgrounds, courtyards, as well as miles of pedestrian and bike friendly access connecting the neighborhood to the surrounding area's and amenities.The community itself is striving to remain reminiscent of a simpler time, when neighbors gathered and children rode their bikes in a safe, ecological environment. 

Located in Beaverton, the community is just a few steps from high tech companies like Nike World Headquarters, Tektronix and  Intel. If you are looking for a modern community with a focus on sustainable living, and convenience to all that Portland has to offer, look no further than 45 Central. 


Although it will take several years to complete the project, the first phase is due for completion in Early Fall. The price range for a condominium is $89,900 - $187,900 and single family homes range from $234,900 to $349,900.

Check out the item featured on KGW recently: 
http://www.kgw.com/news/business/New-Neighborhood-In-Beaverton-159660245.html


Cheers to an Excellent Second Quarter in Real Estate


We are excited to be ranked the 9th highest producing team in all of the Northwest for Keller Williams! If you or someone you know is in need of a real estate resource in today's market, we would love to hear from you.

Steve Roesch
Principal Broker
PDX Home Group
Keller Williams Realty Professionals
503-318-6351
steve@ PDXHomeGroup .com

Search Homes for Sale in Portland

Thursday, June 14, 2012

Foreclosure Increase Induced by Moratorium?

Despite an increase in foreclosure starts in May, there is evidence that the Real Estate Market is indeed on the mend. Most likely, this jump in activity is due to the banks having just finished a moratorium, while they settled the $25 Billion government reimbursement legislature.  It's no different than many other spikes after other previous moratorium  that banks have either self enforced or government imposed.  It seemed like more of a hesitation than a true moratorium this time around, and this isn't the same market as 2011 or 2010. It's quite a bit healthier indeed.

Before we get our panties in a bunch it is important to note the reasons for this increase:


  1. The jump in foreclosure starts is not indicative of a new batch of borrowers missing payments.  In fact, new delinquencies fell during Q1 2012.
  2. Many "Shadow inventory" homes that banks have been holding onto during the "moratorium" will be hitting a much stronger market of already reduced inventory. From my professional experience here in Oregon, many banks are cleaning up the homes and putting them on the market for more money than one would expect, and receiving multiple offers.
  3. "The May numbers were up the month after that settlement was completed is an indication that lenders are more confident that there are clear ground rules to foreclose now, so they can play by the rules," said Daren Blomquist, RealtyTrac's vice-president.
  4. Many of the new foreclosure starts will most likely end in short sales, up 25 percent in the first quarter of 2012 reaching a three-year high. This due to lenders being able to get a higher price in a short sale than if they repossess them and then put them back on the market.

Source: Reuters.com,  U.S. foreclosures up for 1st time in 27 months by Anna Louie Sussman

See Full Article: http://www.reuters.com/article/2012/06/14/usa-housing-realtytrac-idUSL1E8HD88120120614


Thursday, June 7, 2012

Our Little City is Growing Big



Out of the 366 metropolitan areas analyzed by the Business Journal, Portland now ranks 22nd largest. It seems that 81 people per day are discovering what we have been fortunate to know all along - Portland pretty much rocks. In just one year, Portland's population increased by 28,704. Hmmmm, I am feeling inspired to perform my own study of the recent transplants to break down the ratio of young professionals versus hipsters. Albeit, according to a recent poll by Yahoo Travel, Portland ranks #2 of America's best cities for hipsters.

Fun facts about the Rose City:

  1. The name "Portland" was determined by a toss of a coin by two original settlers Asa Lovejoy of Boston, Massachusetts and Francis Pettygrove of Portland, Maine.  Pettygrove won the toss (best 2 out of 3). Check out the coin, the "Portland Penny" which is on display in the lobby of the Oregon Historical Society.
  2. We are truly in "Beervana". Portland is home to 28 breweries, making us the single largest beer-producing city the world - take that Cologne Germany!
  3. Oregon is one of two states where you can't pump your own gas - major perk during the rainy season.
  4. No sales tax! Although we still pay our share in property and income tax which equates to about the same amount when compared to other states.
  5. If you see someone with an umbrella, they are most likely not a local. 


Tuesday, May 8, 2012

Is Housing as Affordable as It Will Ever Get?


In the past four days alone, our team was fortunate to represent buyers and sellers in 23 offers on five properties. Combined, the offers totaled over $67,000 above the sellers list price with only one offer being accepted with a discount of $5,000.

So yes, we may be seeing the lowest home prices in our lifetime right now. With mortgage rates stooping to record lows, now is the time to maximize your buying power! As rents have been on the rise for some time, it makes sense for many to make the transition into ownership, creating more competetion for the shrinking inventory in Portland. For more information on the state of the market click on th link below, and contact our team to find out how to best take advantage of a home ownership opportunity before housing prices fully recover.


Click Here for the full story in Realtor Magazine


If you or anyone you know would like to learn more about opportunities in the current market, we look forward to serving as your #1 resource in real estate.

Thursday, April 26, 2012

"Finding Portland" The City We Call Home

Produced by Uncage the Soul Productions, it took the team of four 51 days, and an average of 3.8 hours per second to create this masterpiece. The video itself is composed of 308,829 photographs in 50 different Portland area locations including a teaser of our beloved Timbers. So check it out, and while your at it, thank your lucky stars to be a Portlander!


Finding Portland from Uncage the Soul Productions on Vimeo.

Wednesday, March 28, 2012

Wait for it... Wait for it... Too late

By the time you know the market had turned the corner, you are too late. Because it already happened.

The article below is about what's happening across some cities in the US. And its happening in many parts of Portland right now too.

As reported in the Bloomberg/Businessweek article today 3/27/12.  see full article

Bidding wars, absent from most parts of the U.S. residential market since its peak in 2006, are erupting from Seattle and Silicon Valley to Miami and Washington, D.C. The inventory of homes hovers close to a six-year low, while an increase in jobs and record affordability are tempting more buyers. The number of contracts to buy previously owned homes jumped 14 percent in February from a year earlier, the National Association of Realtors reported yesterday.
Here's an interesting portion of the article talking about Palo Alto and the Facebook millionare hype.  By the way, I've seen this Realtor speak at a conference 2 years ago, and he's not what you'd expect from a stuffy luxury home Realtor.  But he is exactly who you would expect Mark Zuckerberg to have as his agent.

Competition Increases

Agents encountered multiple bids on about half of offers in Seattle, Boston, Washington, D.C. and Oregon this year through March 15, said Tim Ellis, real estate analyst for online brokerage Redfin. In the San Francisco area, Redfin agents reported that three of four offers involved competition, he said.

One home in Palo Alto, California, received 38 offers and sold for $1.65 million, or $452,000 more than its asking price, said Ken DeLeon, a real estate broker in Silicon Valley since 2002. Another client paid $2.56 million for a home in 2007 and is listing it for $3 million, with the expectation of receiving higher offers, he said. The seller wants to use the proceeds to buy a home in Saratoga, about 18 miles southeast of Palo Alto, where the market hasn’t heated up yet, DeLeon said.

Prices are hitting all-time highs, above Palo Alto’s 2007 peak levels, in the 94301 and 94306 ZIP codes, as buyers rush to purchase in advance of an expected flood of newly minted millionaires when Facebook Inc.


Thursday, March 15, 2012

February 2012 Real Estate Report

The latest real estate market report for Portland has come out and this is exciting enough to have to share.  Here are the key points:

  • Sales continue to keep rising.  This means more buyers are entering the market place.  Also important to note, that if buyers enter the market and buy, that means lenders and banks are actually making more  loans.  Which was part of the sluggish past 5 years, they were issuing more declines than before.  It takes 1 year to recover from bad credit.  It takes 2-3 years to recover from a short sale.  It takes 4-7 years to recover from foreclosure. 
Could we now be seeing buyers re-enter the home buying market that perhaps were some of the first casulties of the recession?
  • Less listings again this month.  As this supply and demand ratio continues it will put pressure on prices.  It didn't affect prices much for 2011.  Mostly because the trending didn't begin until 4th quarter.  I think what we are also seeing is short sales being approved.  And the short sales are being approved at lower prices, and as the bank owned enter the market they put their value based on what the short sales sell for.  Short sales take 3 months to a year to approve.  So many of them have had their prices set more than 3 months ago.  It's hard to see movement in current prices when we have stale listings such as short sales firmly holding on to yesterday's prices
  • Lastly, well, prices have decided to bump up after all the supply and demand talk. The average sales price in Feb 2012 was 4.3% higher than Feb 2011. The year to date average sales price is up 1.8% over the same time frame 2011.  And, finally, a month to month increase from Jan 2012 to Feb 2012 of 2.4% 


Tuesday, January 31, 2012

Foreclosures Decline in Portland, but not every part

Latest statistics from CoreLogic and RealtyTrac have shown that Portland foreclosures are on the decline in 2011, and will continue throughout 2012.  Rates of decline in Portland have dropped by 3.21%, making the percent of homes in foreclosure for the city 2.39%.   The amount of homeowners delinquent on their mortgage payments, is also lessoning.  The foreclosure percentages are fairing better than the nation, and also better than the state.  The state is at 2.8%, and that was an increase.  The overall national foreclosure rate is 3.41%, and that number is on the decline.

Things are sounding good for the Portland area.  RealtyTrac reports that the percentage of sales for the nation that are actual foreclosures is around 20%.  Whereas in the state of Oregon, only 15% of home sales are comprised of the bank owned (REO) properties. 

I thought I would take that a little bit further and show you what 2011 looked like in some local sub markets of Portland.

For the first month of the 2012, the following statistics are RMLS data of the percent of bank-owned, single family residences and condos, in proportion to the total closed sales for each area.

  1. Beaverton/Aloha      35%
  2. SW Portland            20%
  3. Hillsboro                  36%
  4. NW PDX 97229     10%
  5. NE Portland             18%
  6. SE Portland              29%
  7. Lake Oswego/WL   18%
  8. Tigard/Tualatin         26%
It appears there is more foreclosure activity going on than the Realty Trac suggests.  Or, the January 2012 numbers suggest that Nov and Dec sales were gobbling up more bank owned homes that the previous year's trend. 

Nevertheless, what occured in the last months of winter, is reflected in the first part of the year, and the result has left us with an anemic supply of inventory, both traditional, bank owned, and short sale.  We now are at the lowest level of housing supply in the last 3 years.  The metro area of Portland sits at 5.3 months.

Wednesday, January 25, 2012

More jobs and less houses?

2011 finishes with 2 major indexes showing the lowest levels in 3 years for the Portland Metro area.
  1. Unemployment = 8.9%.  We have finally broken the 9% floor and continue to move lower.  Dropping 2 tenths of a point from November, after being seasonally adjusted.  The highest level reached was 11.6% in mid 2009 and has been generally declining ever since.
  2. Unsold housing supply  = 5.3 months inventory.  This is the lowest level of inventory for the last 3 years reporting. The highest level of inventory was early 2009 and reached near 20 months.  That's almost 2 years supply of homes on the market.  It hasn't been a steady decline the last 2 years.  It's been more like a yo-yo, due to 2 significant tax incentives. These incentives increased buyers activity before those key times, and then were followed with sluggish behavior, until 2011, which appeared to be a steady decline.
We know that buyers have been helping gobble the inventory because low home prices and low interest rates, are making record low monthly payments.  Also, inventory has been held low, as 2011 has shown less foreclosures being taken back by the banks.

But let's be frank.  Without jobs, there is no consumer confidence.  Potential buyers with fear that any day they will be next in the unemployment line, won't be shopping for a house. 

Therefore, it is no coincidence that these 2 indexes are declining hand in hand.  Although, 5.3 months inventory is a great number in the real estate world, 8.9% unemployment is no figure to write home about.  And with economists still threatening that banks are withholding a large number of shadow inventory yet to hit the market, we should still stay on our heels.  But, the clouds are lined with silver now.